Nullius in Verba

A while ago I put up a graph demonstrating why Danny me b’y Williams needs to STFU regarding this whole whine about Newfoundland and Labrador not getting enough moolah from the Federal Government. Since this time the other premiers of the Atlantic Provinces have started whining long and loud so that they get as much of the pie as they can when Stephen Harper realizes he’ll get no seats in the Atlantic area in the next election and caves into their demands.

(Federal Transfers (All) to Provinces Per Province Capita)

As usual the Mainstream Media (CTV CBC) have done a bang-up job of not explaining what the issue is about. Harper isn’t helping either because he’s been saying nothing about it on air. This leaves pug-dog yappers like Stephane Dion and Jack Layton to make all kinds of promises they could not keep.

I’m going to place into layman’s terms what the whining is all about right now. In this example the Corvette represents Natural Resourses such as oil:

Basically you have a room-mate friend who makes less money than you. So you agree to subsidize his rent a bit. You pay $350 per month and he pays $250. (You’re paying $50 in transfer payments to your room-mate). One day your room-mate inherits a Corvette from his dead uncle. Your room-mate needs cash so he sells the Corvette for $5000.

So you approach your room-mate and say, “Hey buddy, like, can you pay $300 a month now because you have $5000 in the bank?”

And he says, “No way man, that was a one time sale. I’m going to need that to pay my tuition debt, buy a gym membership, a TV and some CDs.”

So you tell your friend to fuck off, and everyone else takes his side.

These guys who wrote the AIMS Report basically use a convulted bit of accounting to explain why your friend is right not to help you out with the rent. They are saying that the Corvette is a financial asset which is still an asset when converted into money.

What it really comes down to is this. Either you believe that:

A) Subsidies should prop up poorer provinces. Poorer provinces shouldn’t have to balance their books, they should just be able to tap into the rest of our wallets to do it.

B) Poorer provinces should balance their books. If there are no jobs people should move to places where there are jobs and quit relying on government pogey.

The right answer that leads to economic prosperity is B even though it is a hard road for those people. But I had to move for work too so I have sympathy and understanding - but that’s life.

I have always maintained that instead of these crazy transfers and subsidies the government instead should give people money to move. In fact that is precisely why people went to Canada. Also it is why many Newfoundlanders are flying to Alberta to work on rigs. Responsible people know that they shouldn’t rely on the rest of us when they can do things for themselves as hard as it is.

What is often left conveniently out of any CTV or CBC report is that the experts agree and applaud the Harper government for enacting the clean and well thought out process for determining transfer payments. Not that I agree with this subsidy, of course.

What they should do is this. But then the world would be perfect.

(In Eden No One paid taxes and everything but apples were free)

Well well well. It hasn’t been more than five minutes since the Conservatives released their new budget for Newfoundland and Labrador (or more specifically Danny Williams) to start whining again and again. (See my previous post on whining and complaining and why transfer payments are a bad idea in general).

(Hercules knew what to do with greedy people)

Let me be clear, first I am an honorary Newf, being married to one, and having been screeched in and “puffin-ed”, and having been and driven to the Rock more than one time too many. But it never feels like enough.

This time Danny b’y you just need to STFU because oh me nerves, dey got me drove [crazy]. NFLD has been raking it in for years. It sure doesn’t look like it is going to stop any time soon either, me lover.

From Stats Can, Total government transfers to provinces per capita. Well a piccie is worth 10,000 bucks any day:

 
(Take that Rest of Canada, Click Picture for Larger View)

So its time Danny, me boy, ye stopped complaining and diverting everyone’s attention from your own mistakes regarding how you’re chasing away big oil because you’re starting to do what this guy does.

(I smell sulfur and it ain’t Georgie Boy)

And dat, me b’y, been n’ar good.

Update:

 A Newfoundland economist finds that Newfoundland and Labradour do better under the new transfer payments agreement.

It is my opinion that all knowledge of human nature can be found in Aesop. Aesop was apparently a Greek slave in the 6th century B.C. hence his appreciation for human morality must have been cynical indeed. (Greek slaves tended to be highly educated, yet must have been paid, well like a slave - which should be enough to make anyone cynical. Perhaps my friend Carlo can explain graduate student slavery in more detail here).

(Aesop: An Economist before his time)

The Tale of the Goose That Laid Golden Eggs is attributed to Aesop. Regardless of the fact that most of you, like me, were educated in the suspect public education system, you’ve probably heard this tale. Basically some poor dude gets a goose that lays golden eggs. He and his wife aren’t happy because they aren’t getting rich enough and figure that the inside of the goose must be loaded with gold and so they kill it. Cutting it open they find its just like any other goose and they’re poor again, albeit they do get to eat their just desserts.

Humans must long have had an appreciation for geese since the Brother’s Grim also have a similar story about a golden goose, except this time the goose is made out of golden feathers. A guy called Dummling (because he is ignorant yet well-meaning and generous) manages to win a real golden goose. People get greedy, start trying to pull out the feathers and get magically stuck to the goose doomed to follow it around until the end of days presumably, or at least until they’re eaten by a large wolf or gingerbread man.

(10th Century Jack Layton)

Perhaps the second goose story with its flock of foolish stucklings is more fitting when it comes to my present subject:

 The Folly of the Minimum Wage. by Aesop.

Once upon a time in a strange place where animals defied evolution, far far far (too far even by plane) away a group of people called the Ozzies discovered this thing called the Minimum Wage.

(Only some things get better with age. Mel and the MinWage, NOT)

The Minimum Wage (after wreaking havoc in Oz) migrated to the United States like everyone else in the 1930’s and was quickly drafted into the effort to fight poverty and the Depression when everything was being tried except sound economic theory.

It is estimated that over 40,000 Americans lost their jobs directly from the government enacting the Minimum Wage within 1 year. (P. H. Douglas and J. Hackman, “Fair Labor Standards Act of 1938, II,” Political Science Quarterly, March 1939, pp. 29-55.)

So why the minimum wage? Currently in Ontario the Givernment (not a sp.) has decreed in its infinite wisdom that to solve all the problems of poverty the minimum wage must increase to 10 dollars an hour. The Toronto Star, known for its earth-shattering common nonsense and long-in-the-tooth anti-americanism, has borrowed a phrase from the great minds of US mobilization and declared a War on Poverty.

(This artsy picture is guaranteed to stop poverty, can you feel it working?)

Now let me say, because I can feel the moonbats circling that I am not against poor people. In fact I was poor (financially) for almost as long as I can remember. I just happen to believe (and know it to be true) that the very methods used to try and help people often do more harm than good. The one true equalizer and enabler of mankind is the free market. In fact it makes me angry to see my taxes used to hurt people.

Clicking on the above fancy artsy picture against-poverty-and-providing-a-passionate-influencial-feeling-in-the-proletariatTM will provide you with a long number of comments from well meaning but uneducated (in economics) people. Insterspaced within the comments are those of a few people crying out in the wilderness about the fallicy of the minimum wage. Those people are quickly executed.

On one hand I feel compassion for people who mean well like this. I hate writing these sober things this because some people are so sure of their beliefs the CBC has brainwashed into them regardless of the evidence. However it has to be done.

Absolutely some businesses would suffer — the ones who are now prospering on the work of employees who can not afford to feed themselves. If a company can’t stay afloat without forcing their employees to live in squalor and eat food bank handouts then they should not be in business.
William Hopper, Kingston, Ont.

On the other hand the Toronto Star feedback is also full of comments such as this dangerous and in my opinion mean-spirited comment. Take that you stupid greedy mom and pop business how dare you pay low wages to people willing to work. The type of comment from someone who wants to tell the rest of us what to do in the name of “What Society Wants”.

(Society’s best intentions are often keelhauled by lurking unseen forces)

According to the International Labour Office (an unbiased source if ever there was one), the Minimum Wage:

• increases living standards

• reduces exploitation

• encourages bargaining

• creates working incentives

• is set by a variety of committees and people with vested interests*

You can read more of their propaganda (which is really devised to support Big Labor Unions and keep the Third World poor) but here at clangmann.net we don’t bother with feel-good lies.

Countless economic studies since then have shown that Minimum Wage, for all its well meaning intentions has some disastrous consequences which should never be understated. Ever. The first thing you learn in real life is that you don’t get something for nothing.

Minimum Wage causes unemployment in the very people it is supposed to help. (Charles Brown, Curtis Gilroy and Andrew Kohen, “The Effect of the Minimum Wage on Employment and Unemployment,” Journal of Economic Literature, June 1982, pp. 487-528.) Unemployment is one of the most insidious economic diseases you can ever give a human because every year they are unemployed is a predictor of further unemployment. Why? Skills in the workforce, motivation, and employability are lost.

Whenever high minded people speak of raising the minimum wage I retort, “Yeah if the MinWage is so great we should raise it to like 20 or even 100 dollars or something” (often to their astonishment since they expect that since I like am a doctor and everything I must be a socialist kind of person who wants to tell everyone what to think and do like they do). These people almost always invariably reply, “Don’t be foolish, 20 bucks would be too expensive to the employer and it wouldn’t work.”

The cool thing is that deep down inside they know there are consequences to every feel-good action. I attribute this to good parenting. However what I often find amusing is how they all seem to know just how much an employer can pay before they go out of business.

(In Sodom they know the consequences of feel good actions though this guy getting some action doesn’t seem to mind much while Sodom burns behind)

Thankfully economic both theory and evidence can show us the way out of Gomorrah. So here goes. Basic economic theory constructs Supply and Demand curves for labour as follows.

 

This standard economics graph has Quantity of Labour (Q) on the “x” axis and Price (P) on the “y” axis. This is a Labour Market Graph for a segment of a market, say boat-making.

The red line designates Supply of Labour, the Supply curve, and can be interpreted as follows; as the price increases, the number of people willing to work (quantity, Q) increases. Not many people are willing to work at 0 dollars, but as the price increases the number of people willing to work increases. To bring more people into the labour force and in particular your segment of the labour force, the price needs to go up or people move elsewhere.

The blue line is the quantity (Q) of workers demanded by employers. The Demand curve. If the price is very high, the number of employees demanded is close to 0. At such a high price employers look for substitute inputs of production rather than humans. As the price falls, more workers are hired and less substitutes are used, ie: computers, robots, weaving machines, windmills, horses etc etc.

Where the Supply and Demand curves intersect is the most beautiful occurance in economics. This is the equilibrium point where the price for the number of employees demanded by employers equals the price of the number of employees willing to work. This is Price 1 (P1) and is the wage paid by employees to workers. In the free market since the beginning of time when humans first traded stones for other stones, this is how wages have been set. Government was not required. 

When government raises minimum wage artificially to Price 2 (P2) suddenly the equilibrium is unbalanced. Employers follow their demand curve to P2 and are now only willing to hire Q2 worth of labour. Unfortunately at P2, many more workers are willing to work in this market but are not hired as employers find substitues for them. The green bracket at the bottom represents the Real Unemployment in this market.

Substitutes for expensive employees have existed since the beginning of time. Almost all human inventions have been made to increase the productivity of one human. When human labour becomes too expensive, employers switch to the substitutes that increase human productivity thus requiring less humans. France, notorious for strict and convoluted labour laws still produces most of the US supply of Viagra at their Pfizer plant. The plant is completely automated.

Oct 26th 2006
From The Economist print edition

ON THE banks of the sleepy river Loire, across the valley from Amboise’s historic château royal, stands a model of modern high-tech French manufacturing. In a neatly landscaped business park, Pfizer, an American pharmaceutical giant, produces 80% of the world’s Viagra, and the entire supply for the American market. Every bottle of Viagra bought in an American drugstore will have been filled, packaged, labelled, bar-coded and shipped from this site…

(Human beings are a disease, a cancer of this planet. You are a plague, and we… are the cure. - Agent Smith)

Ok Ok, so enough theory. Theories like anything must be offered to the gods of scientific proof. Lets examine the evidence.

It was only in the late 1990s that Card and Krueger started to question the economic notion that increases in minimum wage caused unemployment. They performed a study using employer surveys where they basically asked employers if they would hire less people if the government raised minimum wage. The answer to the survey was NO.

(Hold the presses)

This was one of the first times economists questioned the premise. Since then, this book has been highly criticized, in fact, Krueger said, “I want to emphasize that my comments should not be interpreted as support for the position that increasing the minimum wage is sound public policy.” (Alan B. Krueger,”Have Increases in the Minimum Wage Reduced Employment?” Jobs & Capital, Summer 1993, p. 11.) 

More importantly people began to take a better look at the data and review the theory. As JS Mill states in On Liberty, “If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.” In other words, wrong ideas have as much worth as correct ones, because by refuting wrong ideas we make the correct ones stronger.

Since this time more rigorous reviews of statistics and analysis have been asked for and discussed. David Neumark’s seminary paper sets a guidline for the proper use of statistics and analysis before “going to the data”, in other words commit to an analysis before examining the data to prevent research bias. In his opinion too many studies were designed with outcomes in mind.  (David Neumark, “The Employment Effects of Minimum Wages: Evidence from a Prespecified Research Design” Industrial Relations, Vol. 40 No. 1 2001)

“On the one hand, the limits of the research design are clear—only data after the policy change can be included in the analysis . . . On the other hand, the strengths of this method are avoiding unconscious and conscious biases of the authors, editors, and referees.”

From his research Neumark finds that “evidence of disemployment effects of minimum wages tends to appear where we would most expect it - for younger, less skilled workers“. Moreover he shows that there can be a lag between implementation of the minimum wage and the subsequent unemployment effects.

So what does this mean for Canada? Well similar studies have been done up here. In general those studies are more interesting to me because each province in Canada sets its own minimum wage, thus each province is its own microcosm of data. Campolieti et al. show that minimum wage:

• has adverse employment impacts on less skilled workers and young workers

• may cause more part time employment at expense of full time

• there is a lag between implementation of minimum wage and its causation of unemployment which may run at around 6 years

(Michelle Campolieti, Morley Gunderson, and Chris Riddell,”Minimum Wage Impacts from a Prespecified Research Design: Canada 1981-1997″ Industrial Relations vol. 45 No. 2 2006)

“Minimum-wage increases in Canada have led to substantial adverse employment effects.[...] The overall results are fairly robust with respect to alternative specifications including: the inclusion of an additional control for the prime-age male skilled employment rate and, entering the minimum wage and the average wage as separate explanatory variables.

The adverse employment effects are larger after lagged adjustments occur for the most part. However, some of our estimates suggest the contemporaneous effect may be larger for lessskilled workers.”

This is particularly insidious to people about the enter the job market. Many employers look at previous employment before hiring, especially in competitive labour markets. If a potential employee has worked before they are much more attractive even if their labour was in an entirely different area. Why? It has to do with asymmetries of knowledge but basically it comes down to indicating to someone who has no idea who you are that you are an acceptable employee.

The effects from the minimum wage in Canada are measured in an economic term called elasticity. The %change in employment divided by the %change in minimum wage = minimum wage elasticity. The result from Campolieti is an elasticity of -0.30.

The Ontario government intends to raise the wage from $7.75 to $10 over the next few years (2010). This is a %change of 29% which works out to an increase in unemployment of 8.7% in people of the ages of 16-24 inclusive.

Even that self centered peculiar person, Cherniak, knows its a bad idea though he isn’t competent at all in his analysis.

Even social workers know its a bad idea. Minimum wage increase have been shown to increase utilization of welfare.

“But, but but,” cry the masses of well meaning Toronto-ites, “if the givernment doesn’t raise wages then poor people will suffer!” After all don’t you know that employers just love to grind up workers and fertilize the fields with their bones? Well rest assured, folks, the free market is there to save us once again. Productivity and economic growth raises wages for everyone. Take Alberta for example, where even workers in minimum wage type jobs have seen their salaries increase.

So next time you see a golden goose, don’t kill it. Its just not good eating.

(Dalton McGuinty - Ontario’s Dummling)

And so the tale of The Folly of the Minimum Wage ends. The People of Ontario are happy, they are stuck to Dummling McGuinty and his Golden Goose. For some people to feel good other people just have to suffer.

(A great review of minimum wages and worker protection can be found in Milton Friedman’s aged yet timeless serious “Freedom to Choose”. It directly applies to this subject. You can donwload them here or watch them here. Milton Friedman called minimum wage one of the most anti-nego laws ever created.)

Note: Clicking the Links is important to understand my rambling)

The New Government of Canada released its federal budget this week with much fanfare and progressive words like “achieving our country’s full potential“™ and other such big word terminology.

(Why are they smiling? Conservatives are so green they’re now hitch-hiking.)

Now lets make some things clear before I ramble on. In my humble opinion this budget is, for the most part, a big waste of my money. But then again as the Canadian Taxpayer’s Federation (CTF) laments, “Legislators are incapable of demonstrating restraint. [...] And they are also unwilling to return the surplus where it rightly belongs, namely the taxpayers of Canada“

(hey, 24% off, times 5% GST)

The ides of March rolled on, and Imperator Harper managed to wriggle away from the steely knives and duck his way out of something nobody wanted at the moment: a repeat of the 2006 civil war. Many libertarian conservatives watching their blood-money swirl clockwise down the toilet are left thinking Et Tu Brute? But libertarians will always feel that way (more on this later) since from the beginning of time we’ve always been bullied by what enterprising politicians manage to call “What Society Wants”.

(Tower of Babel: What Society Wanted)

Canada’s conscience, CTV newsmedia, seemed to be so bored with this complicated budget that, like a college student sweeping dirt under the couch in preparation for his girlfriend’s visit, they quickly swept it off into a hard to find area on their web page (I challenge you to find it). Then they filled the section with a variety of opinion from people who are usually totally against everything in general. The only memorial moment in CTV’s reporting is from the old weasel, Craig Oliver who is so stunned by the copiousity (word I made up to describe silliness) of the shiny presents that he must have had a hallucination that he was living in the glory days of P.E.T. again and randomly challenged anyone to find anything wrong with the big bonanza (paraphrase).

So WTF does “Society Want?”. Well a recent (and suspect) poll shows:

When respondents were asked what they thought to be the most important issue for the budget to address, social programs were the clear favourite:

• Increasing spending on social programs: 50 per cent
• Cutting taxes: 19 per cent
• Transferring funds to the provinces for their use: 15 per cent
• Reducing debt: 13 per cent.

AND

When respondents were asked whether they thought the claim of a so-called fiscal imbalance was believable, the majority said yes:

• Very believable: 31 per cent
• Somewhat believable: 43 per cent
• Total believable: 74 per cent

• Not too believable: 11 per cent
• Not believable at all: 6 per cent
• Total not believable: 17 per cent

So the CTF just reiterates this truth: “A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.” - Alexander Tytler

(I smell sulfur and it ain’t GW Bush)

Anyhow there are quite a few analysis out there on the budget and I’ll get to my point in a minute. First though I have to say that one thing the Conservatives have been doing that the Liberals seem to have a pretty crappy track record on is funding disabled people. However this is something conservatives generally favor strongly. Moreover the Status of Women has its funding back, but it appears that the Conservatives are actually trying to fund real things like shelters rather than silly university professors and other wastes of money.

So anyhow back to my point.

Stephen Harper is probably the most intelligent politician we have had in Canadian politics since P.E.T. and also likely one of the most elegant schemers we have had for a long time. (I do think he is a decent guy with a genuine personality). I guess that basically Harper looked at the way the country was feeling (look up at those polls) and he also pondered on the new Religion of the Kyoto:

Religion of the Kyoto

And its resurrected son Al-Goreacle.

And Harper knew that he had to “head em off at the pass”, to borrow a stereotypical Western phrase (from Westerns not Western Canada).

And so we have a budget that basically fixes the fiscal imbalance, whatever that is, as well as handing out a bunch of money to mystical feel good targets such as the Holy Grail of Global Warming and other fuzzy stuff. Once again the Conservative party of Canada does the real environmental work that the Liberals are always talking about.

(The Greenest Chin Ever: The Leprachaun who laughs last, laughs…
and gets the pot of our gold)

Enraged they are, the Liberals. Deep down inside that particular and peculiar socialist waste of space, Stephane Dion, wishes he could have come out with the exact same budget except with more spending (from where the pot is dry?) and perhaps a lower rate tax cut of 0.5%. However they are so angry that they cannot get any play that they just decide they ain’t playing at all and bail out without even reading the budget.

Guys like Dion plagued the halls of every university I went to, wasting both taxpayer money and tonnes of CO₂ credits along their way to social justice - whatever that is… Because for these guys equality of opportunity isn’t the classical meaning, but rather the equality of some being more equal than others. Its equality of outcome they are after. In other words no matter how much evidence that the unintended consequences of their actions are hurtful, or how BS their schemes they will decide who gets what and how; they are going to make us all pay for it. You’ll see what I mean when I write next about the minimum wage Ontario is considering. However the rats are jumping the ship, because if there really is one thing American that Harper brought to Canadian politics it is the ability to buy out and collude with the other side. And so Cormuzzi (Lib) drawn to the musky odor of the well cooked golden pork promise, burns out like a fly in one of those electic patio zappers as Dion punts him from caucus.

(And then the car goes by and bam, the Cormuzzi. Now go to sleep.)

Because Harper knows that for some reason his party cannot break the 40 percent mark that makes a majority in these parts. Conservatives of all stripes have wandered in the wilderness for so long now that it seems they just aren’t willing to wander in the wilderness anymore. They’ve watched the Liberals feasting in Sodom forever, perched on their high place and enjoying the fat of the land while the Conservatives have had to quench their thirst by beating their heads against the stone of balanced budgets and tax cuts taking whatever scraps that fell from the sky from a stupid media that wouldn’t know the difference between basic economics from NeverNeverLand.

And so they re-forged that old idol, the Paternalistic fatted milk-cow god of Conservative old and towed it out in front of the people to see if perhaps the foolish ones would eat it.

(Party like it’s 1999 B.C.)

But think about it. Can you blame Harper? Lets pretend he came out with a sensible prudent budget. It would be like injecting the Liberals with amphetamines and bringing them a Timmies strong caf. to boot.

Because right now there is so much freaking largesse everyone wants a place at the table or they’ll shriek so loud that Hades will seem like just your average day dull roar.

(There’s enough pork for everyone!)

Stephen Taylor at Blogging Tories, himself an independent journalist, has a series of interviews with several groups, many of whom are not happy with their slice of the pork.

The interesting thing is that the pork got ate all up and still no one is happy. Obviously the alternative would have been to bleed us serfs dryer than Liberal money at the laundromat.

And at last this brings me to my point. No matter what they’ll complain and complain and complain…

Because if they stop then they just won’t have jobs left and so as Milton Friedman once said, “No, you would not become unemployed. You would only have to move to a more beneficial kind of employment”.

Tim Robbins made a low budget movie a while ago called Bob Roberts. For those of you who have not seen it, you should. Basically it is about this right wing guy running as a Senator who rewrites all the folk music protest songs of the 60’s in a sort of counter-culture reversal. All of the songs are clever in that they do have an ounce of truth to them. According to Wikipedia, Robbins’ intentions for the film seem to be less partisan, and more about the political system in general (Roberge 1992).

One of the songs:

Complain

Some people will have / Some simply will not / But they’ll complain and complain and complain and complain and complain / Some people will work / Some never will / But they’ll complain and complain and complain and complain and complain / Like this: / It’s society’s fault I don’t have a job / It’s society’s fault I’m a slob / I’m a drunk, I don’t have a brain / Give me a pamphlet while I complain / Hey pal you’re living in the land of the free No-one’s gonna hand you opportunity.

Except in this case, the people complaining are the ones who are getting grants to fund their complaining.

I’ll examine one part of the budget, the equalization strategy part. Equalization payments are like a mini-cosmos economic study as to why subsidies don’t work. We’ve been funding Quebec for years and they don’t seem to be getting any more equal, in fact it appears they just get less equal all the time - sucking up money like a sponge.

Right now everyone has their nuts in a knot about the next round of equalization payments. Here’s a summary:

Following are the 2007-08 per-capita equalization payments for the receiving provinces with the 2006-07 payments in brackets. (All figures in millions):

• N.L.: $477 ($632)
• P.E.I.: $294 ($291)
• N.S.: $1,308 (1,386)
• N.B.: $1,477 ($1,451)
• Que.: $7,160 ($5,539)
• Man.: $1,826 ($1,709)
• Sask.: $226 ($13)
• B.C.: N/A ($260)

Basically the formula is meant to bring those up to the 10 province average. Danny Williams is as pissed as ever because he doesn’t get to write off 100% of natural resources, and here Guinty is pissed because Danny Williams gets to write off 50%. Saskatchewan is pissed because basically they’re getting more money.

Anyhow this convoluted mess proves one thing. When it comes to “equalization” or social transfers or basically robbing one guy to pay another, you end up pissing everyone off.

Here’s how it should work: No equalization payments. Let people move to where the jobs are. Equalization payments just prop up failure, like any other subsidy. Its been that way since the beginning of time and no one has ever made it work without hurting someone else and enabling people to do unsuccessful things. No one.

In fact what subsidies do is prop up the very people socialists hate: rich fat influential businessmen - because it props up their business.

For example the other day that Jack Layton guy railed on CHRA radio about how we should be both forcing and paying North American car companies to produce efficient cars instead of those crappy heaps they make now.

Excuse me? We should give taxpayer money to Detroit to prop up their failing businesses because they’re too stupid to make cars people want? And the Unions who are too stupid to realize the realities of global trade? (Anyone who wants to learn the theory of how subsidies always result in negative outcomes click here and scroll down to the Impact of Subsidy.)

And you can be sure that Stephen Harper, a trained economist, believes in subsidies about as much as Stockwell Day believes in fossils.

So then what would have been the ideal budget for those budding libertarians?

Andrew Coyne has a great summary of this which has been discussed amongst those who both:

a) care about what happens to people and,
b) are educated in economic theory

I mean would you trust your health to some guy at a store or would you trust a trained doctor more? Why are people so eager to trust politicians who have never read a simple macro/microeconomic theory text? Maybe for the same reason a certain bunch of moonbats only trust witch doctors and quacks.

With half of all the money spent in the last two budgets (11 billion), you could reduce all the income tax rates to 20%. In other words two rates, 15.5% and 20%. Also you could increase the bottom allowable deductable so that poor people aren’t taxed on money they don’t really have.

Yes folks, now ask me, what does more? Letting people spend their own money or having the government do it for them?

To Those Moonbats who are worried that the Government isn’t spending enough:

(StatsCan, compiled by langmann)

(One good thing about the conservative budget is the working income supplement or a “negative tax”which was originally proposed by the genius, Milton Friedman and which I may discuss in greater detail at some point later.)

Update:

(Like I said)

And even after all this, “poll numbers show the majority (55 per cent) of Canadians thought Quebec benefited most from the transfer of funds under equalization, a majority of Quebecers (51 per cent) believe they received less than their fair share.”

Hmmm. Remember what I said about equalization payments? Sure you do.